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The zones of discrimination for M-Score is as such:
An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.
During the past 13 years, the highest Beneish M-Score of EMCOR Group, Inc. was -1.01. The lowest was -3.12. And the median was -2.47.
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of EMCOR Group, Inc. for today is based on a combination of the following eight different indices:
|M||=||-4.84||+||0.92 * DSRI||+||0.528 * GMI||+||0.404 * AQI||+||0.892 * SGI||+||0.115 * DEPI|
|=||-4.84||+||0.92 * 0.9792||+||0.528 * 0.9309||+||0.404 * 1.0029||+||0.892 * 1.0042||+||0.115 * 0.9527|
|-||0.172 * SGAI||+||4.679 * TATA||-||0.327 * LVGI|
|-||0.172 * 1.0848||+||4.679 * -0.028||-||0.327 * 1.0218|
|This Year (Mar15) TTM:||Last Year (Mar14) TTM:|
|Accounts Receivable was $1,231 Mil.|
Revenue was 1589.187 + 1714.796 + 1566.711 + 1558.055 = $6,429 Mil.
Gross Profit was 216.929 + 248.573 + 222.229 + 219.635 = $907 Mil.
Total Current Assets was $1,827 Mil.
Total Assets was $3,316 Mil.
Property, Plant and Equipment(Net PPE) was $118 Mil.
Depreciation, Depletion and Amortization(DDA) was $74 Mil.
Selling, General & Admin. Expense(SGA) was $645 Mil.
Total Current Liabilities was $1,213 Mil.
Long-Term Debt was $311 Mil.
Net Income was 32.849 + 42.466 + 45.024 + 39.913 = $160 Mil.
Non Operating Income was 0 + 0 + 0 + 0 = $0 Mil.
Cash Flow from Operations was -17.821 + 137.663 + 69.354 + 63.956 = $253 Mil.
|Accounts Receivable was $1,251 Mil.
Revenue was 1590.539 + 1649.279 + 1605.315 + 1556.753 = $6,402 Mil.
Gross Profit was 216.203 + 236.871 + 206.562 + 181.535 = $841 Mil.
Total Current Assets was $1,881 Mil.
Total Assets was $3,408 Mil.
Property, Plant and Equipment(Net PPE) was $122 Mil.
Depreciation, Depletion and Amortization(DDA) was $71 Mil.
Selling, General & Admin. Expense(SGA) was $592 Mil.
Total Current Liabilities was $1,202 Mil.
Long-Term Debt was $331 Mil.
1. DSRI = Days Sales in Receivables Index
A large increase in DSR could be indicative of revenue inflation.
|DSRI||=||(Receivables_t / Revenue_t)||/||(Receivables_t-1 / Revenue_t-1)|
|=||(1230.581 / 6428.749)||/||(1251.473 / 6401.886)|
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
|=||(GrossProfit_t-1 / Revenue_t-1)||/||(GrossProfit_t / Revenue_t)|
|=||(248.573 / 6401.886)||/||(216.929 / 6428.749)|
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
|AQI||=||(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)||/||(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)|
|=||(1 - (1827.293 + 118.274) / 3315.582)||/||(1 - (1881.18 + 122.456) / 3407.516)|
4. SGI = Sales Growth Index
Ratio of sales in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
5. DEPI = Depreciation Index
Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
|DEPI||=||(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))||/||(Depreciation_t / (Depreciaton_t + PPE_t))|
|=||(71.218 / (71.218 + 122.456))||/||(74.342 / (74.342 + 118.274))|
6. SGAI = Sales, General and Administrative expenses Index
The ratio of SGA expenses in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
|SGAI||=||(SGA_t / Sales_t)||/||(SGA_t-1 /Sales_t-1)|
|=||(645.27 / 6428.749)||/||(592.364 / 6401.886)|
7. LVGI = Leverage Index
The ratio of total debt to total assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase$sgai= in leverage
|LVGI||=||((LTD_t + CurrentLiabilities_t) / TotalAssets_t)||/||((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)|
|=||((311.302 + 1212.878) / 3315.582)||/||((330.639 + 1202.414) / 3407.516)|
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
|=||(NetIncome_t - NonOperatingIncome_t||-||CashFlowsfromOperations_t)||/||TotalAssets_t|
|=||(160.252 - 0||-||253.152)||/||3315.582|
An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.
EMCOR Group, Inc. has a M-score of -2.69 suggests that the company will not be a manipulator.
Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations
EMCOR Group, Inc. Annual Data
EMCOR Group, Inc. Quarterly Data